Equipment Acquistion: New or Used?

Every store ends up looking for equipment, whether for a major remodeling and renovation or simply replacing aging physical assets. Prudent, informed decisions regarding equipment acquisition can turn confusion and despair into an exciting opportunity to serve your shoppers better. Inefficient, worn display equipment not only detracts from attractive product presentation, it can actually damage goods and shorten shelf life (in the case of perishables), and therefore reduce profitability.

Unfortunately, many co-ops don't have staff members who are familiar with the complex issues involved in selecting and installing equipment. The advice of a professional, especially when dealing with refrigeration equipment, can save headaches later.

Whether you are looking for display equipment such as shelving, free standing racks or bins, bulk dispensers or refrigerated cases, compressors or cash register and scales, there are a few guidelines that will make your job much easier.

New or used?

The decision whether to buy new or used equipment depends on a number of variables.

Cost: Almost without exception, the initial cost of purchasing used equipment is less, much less, than new. As with almost any product, however, condition determines cost. The better the deal looks at first, the more thorough the inspection required. While used refrigerated display cases can be a steal, for example, the cost of disconnecting, transporting, reconditioning and installing can substantially increase the investment. Leaky freon lines can be difficult (translate "expensive") to repair. I've spent thousands of dollars trying to make a $200 case work properly!

Aimost invariably some retrofitting is needed to suit your installation requirements. Remember that the cost of replacmg used equipment every five years or so may mitigate any immediate savings. And consider the potential loss of sales and customer satisfaction due to down time as well as the likelihood of increased spoilage when calculating the true cost of used refrigeration equipment. Typically, you can expect to pay about one-quarter to one-half for used cases and compressors. Check with a qualified refrigeration expert to get a true picture of the overall savings before you buy.

Cash registers are one of the most crucial pieces of equipment you can buy: the more sophisticated, the higher the cost. My suggestion: buy the best you can afford and get a reliable service contract.

Shelves, bins, shopping carts, display fixtures, register stands, etc., are easier to evaluate. What you see, usually, is what you get. Consider the cost of bringing these items into serviceable condition when evaluating their true cost.

Availability: Depending on your location, new store equipment can usually be had rather easily. Most major manufacturers have regional sales offices eager to sell you whatever you might need. Pricing guns, shelf molding price tags, point of purchase sign holders, feather dusters, you name it, can be had from several major distributors, including Murcott and Hubert.

Used equipment can be a bit more challenging! I suggest watching for store closings in your area. Frequently an independent operator facing bankruptcy will "unload" at a fraction of actual value. Check with auctioneers, commercial refrigeration repair services, restaurant supply houses, and finally your wholesale suppliers.

Flexibility and adaptability: Here's where a lot of inexperienced retailers make a fatal error. Custom wooden fixtures too frequently become "grocery furniture," discarded due to its inflexibility. Frankly, the world has too much "grocery furniture" already! The message: don't try to reinvent the wheel; whenever possible, pick the right equipment for the job.

Standard metal grocery shelving, for example, is your best bet because it is adjustable, modular, easy to clean. Refrigerated produce cases make inefficient dairy cases; the design is completely different. Whatever you're in the market for, don't compromise; seek it out.

Cost, availability, flexibility and adaptability are the key concerns when looking for equipment, new or used. Buy the best you can afford, and use professional help whenever possible.

See other articles from this issue: #022 April - June - 1989